China’s years-long lending spree in poorer international locations, notably in Africa, poses a “serious danger” that would plunge the world into the following monetary disaster, German Chancellor Olaf Scholz warned.
German Chancellor Olaf Scholz seems to be on throughout a session of the Bundestag (decrease home of parliament) in Berlin on January 27, 2022, throughout a debate on Europe’s future and Germany’s G7 presidency. Stefanie LOOS / AFP
FRANKFURT – China’s years-long lending spree in poorer international locations, notably in Africa, poses a “serious danger” that would plunge the world into the following monetary disaster, German Chancellor Olaf Scholz warned Friday.
“There is a really serious danger that the next major debt crisis in the global south will stem from loans that China has granted worldwide and doesn’t have a full overview of because there are so many players involved,” Scholz mentioned.
“That would then plunge both China and the global south into a major economic and financial crisis and, incidentally, would not leave the rest of the world unaffected, to put it politely. So this is a serious concern.”
The remark was made throughout an on-stage dialogue at Germany’s Catholic Day in Stuttgart, the place a fellow panellist mentioned Europe had stood by whereas Chinese cash was constructing African roads and universities and rising Beijing’s clout on the continent.
Critics have lengthy accused China of luring lower-income international locations into debt traps by providing big unaffordable loans.
Beijing disputes the cost, arguing that its loans are designed to alleviate poverty.
Scholz mentioned he was pushing for China to hitch the Paris Club of collectors, which have frequent phrases on the right way to deal with international locations that get into bother.
“One of the very, very big ambitions we have is to bring China in, as a country that is lending a lot in new ways,” he mentioned.
He additionally pointed to the European Union’s just lately unveiled Global Gateway initiative, which is partly geared toward countering China’s affect.
Under the plan, the EU goals to take a position greater than 150 billion euros in Africa, in areas starting from renewable power to move, vaccine manufacturing and schooling.
The bold scheme is broadly seen as a response to China’s mammoth Belt and Road infrastructure challenge.